Today our world added its 7 billionth member. Imagine a world population of 7 billion people! While that is staggering, I find the rate of growth even more astounding.

In 1999, we had just passed the 6 billion mark, which is 1 billion people in just over a decade. And in just 8 more years, we are expected to add another 3 billion people. By 2100, we will be a world population of 10 billion people and growing.

I am highlighting these statistics, neither to be an alarmist nor to advocate for more birth control or other social programs. Rather I raise it to ask, what does this mean to us and to our future generations? What will life be like and how will life have to evolve to accommodate this rate of growth?

One thing I have learned, extrapolating the past to predict the future is usually wrong. We create the future so that it solves the problems of the past and this ends up transforming the way we live. This is the very nature of creativity, the very essence of life itself.

The rather dramatic rise in population will inevitably create many new challenges. Challenges that will call forward the creative essence of being human. I cannot predict what that creative energy will produce, and perhaps collectively we can catch a glimpse of some possibilities. What creative solutions will we bring into existence? How do you think our world will change and how will we evolve as a species?

In 1992 Margaret Wheatley wrote a book, Leader and the New Science. I had it in my bookshelf for probably 10 to 15 years but never got around to reading it, that is, until now.

I am amazed at how much she writes is what I present in my book,The Living Organization®. She describes how organizations are really collections of interrelated relationships. And output is defined more by these relationships than the activity itself. She explains that we are all operating in fields of energy and that these fields heavily determine our discrete actions.

She cites a wonderful experiment she did with one of her retail chain clients on customer service. She took a number of the employees to visit different stores. Afterwards they compared notes of what they had experienced. She writes:

“To a person, we agreed that we could “feel” good customer service just by walking into the store. We tried to get more specific by looking at visual cures, merchandise layouts, facial expressions – but none of that could explain the sure sense we had when we walked in the store that we would be treated well. Something else was going on. Something else was in the air. We could feel it; we just couldn’t describe why we felt it.”

Two decades ago Margaret Wheatley wrote about the field of energy I call Context, and described the power of that field to not only impact the behavior of the store employees, but to actually define it. It wasn’t the training on good customer service or the type of Activity they performed, it was the energy of the Context field that created the experience.

This is not the only book I have come across recently that was written ten to twenty years ago and describes in a variety of ways the notion that organization are living systems. Living entities that produce results, not by the rules of machines, but by the laws that govern nature and all living organisms.

Two decades of insight by thought leaders who became popular for a short period of time. I remember when Margaret Wheatley’s book first came out; it was all the rage. Even today people who have read both of our books comment on the similarities.

Two decades and we have not learned. Two decades and we still cling to the notion that we can predict and control the behaviors of our organizations like machines. Two decades of wisdom ignored as if it was a fly buzzing around our heads. Ever present but annoying as hell.

Is now the time for us to heed this wisdom? Did we need time to digest it? Did we need a collapse of what was successful to bring us to the brink, to seek out something new? Perhaps what was missing was the practical implementation, ways we can put these brave new ideas into operation.

Or perhaps we need a new breed of leader. One who was raised with the notion that our world is more than the simple clock-like machine of Newtonian understanding; but one filled with the probabilistic nature of Quantum Physics. Or perhaps we need to wait for leaders to have the courage to step into a new way of thinking and acting. To have the conviction that there is clearly a better way and are willing to try out a new approach.

I can’t help but wonder if The Living Organization® will become that new approach, adopted widely by many organization leaders or whether it too will sit on bookshelves for the next 10 -15 years waiting for its time to come.

Are you ready to finally put into practice the breakthrough understanding of how organizations truly create results, wisdom that has entered our business thinking over two decades ago? Or will you remain rooted in a paradigm that gives us comfort for its familiarity but proves, over and over again, inadequate to address the challenges of the 21st century?

For more information on The Living Organization model visit our website and download our whitepaper and e-books. And look for our upcoming book this Sept.

One of the three tenets of The Living Organization® model for creating results is the interdependence of the three energy fields of Activity, Relationship, and Context. The Context defines what the possible range of results can be. Yet, we continually lean on our predisposition to understand everything through the lens of Activity, the energy of what we do.

I was reading an article this morning citing a study on obesity in China that was published in the American Journal of Health Behavior. It is considered one of the first to investigate weight among Chinese adolescents. Ya-Wen Janice Hsu, a research assistant at the University of Southern California commenting on the study said, “Findings from this large cohort of data on Chinese youth suggest that weight-related correlates might play different roles in Chinese culture than they do in Western cultures.”

The article then goes on to highlight the differences in causal patterns between China and Western societies. They are:

In China, parents with more education and more money were more likely to have obese children, whereas the same circumstances are related to a lower body mass index in Western countries.

Chinese boys were more likely to be overweight than Chinese girls. In the United States, boys are just as likely as girls to be overweight.

Younger children in China were more likely to be overweight than older children. The opposite is true for youth in Western societies.

Chinese adolescents who reported frequent consumption of vegetables and infrequent intake of sweets and fast food were more likely to be overweight.

Frequent participation in vigorous physical activity among Chinese youth was related with greater odds of being overweight.

What I found fascinating about this is all of these are Activity field parameters. The things Chinese adolescents do, compared to what Western teens do. It is not investigating the deeper Context field drivers that influence and define behavior.

When we look at causal factors through the lens of Activity we are limiting our understanding of what is truly creating the results, the outcomes we observe at the Activity layer.

When I was a young manager back in the early 80s I was actively involved in the Quality Movement. I remember when U.S. managers, executives and consultants went over to Japan to investigate how they had outpaced us in bringing quality products to the market. This from a country whose “made in Japan” image was synonymous with junk only a decade earlier.

Our executives learned that Japanese companies had Quality Circles. Aha they thought, the solution was to have regular meetings of employees that focused on quality. And of course, everyone came back to the U.S. and began instituting Quality Circles. And the results? No improvement.

They made the error of copying the Activity they observed without understanding the underlying Context. It was the cultural Context that made the Activity work. After millions of dollars were spent with no results, we kept trying different approaches. Over time and with the investment of more money, we finally began to understand it was “an attitude of quality” that made the difference.

This is the trap and the consequences of viewing our challenges only through the light of the Activity field. We eventually get to the right answer but only after unnecessarily wasting time and money on failed efforts to first change the Activity and stumbling eventually onto changing the Context.

This study will eventually begin to look underneath the Activity behaviors and begin to explore the underlying Context for those behaviors. At that level, I would hypothesize that the differences between Western society and China will have much less differences. The difference will be how each society turns Context into Activity.

Are you wasting time and money by focusing first on the Activity-based solutions without understanding the driving forces that flow from the Context field?

TK Kerstetter, CEO of Corporate Boar Member, described how the image of Board of Directors have taken a real pounding in a recent blog . He participated in a number of conferences where he had the opportunity to interact with hundreds of directors. He wrote:

“ I wish I could have conveyed to the world—or at least the mass media who seem to paint with one broad brush—how sincere the directors I have met are about doing a good job for their companies and shareholders. The majority of the directors in today’s businesses had nothing to do with the financial crisis that sickened this country, but nevertheless they have felt the pain themselves and have suffered overall profession image attacks. To suggest that the directors I interacted with were greedy and didn’t care about their personal reputation, as long as they “got theirs,” would be doing them a terrible injustice.”

I couldn’t agree more. Perceptions of directors have taken a nosedive over the last few years and I agree with Kerstetter–the vast majority of directors are very serious and diligent about their responsibilities. It is hard to explain why such an overreaction has occurred within our society. It’s as though there is a strong need for a scapegoat for our troubles and what better than the “Scrooge image” of business and the leaders who lead them.

Unfortunately, the image of business as something inherently evil probably goes back to the days of sweatshops, Scrooge-like bosses, the “robber Barons”, and all the other tales that have filtered into the societal collective unconscious. And so when we as a collective suffer as we have, the likely culprit is the image of the greedy corporation and their leaders.

The reality though, is most business leaders, and directors are in fact concerned with doing well. They want to see their companies flourish and want to see their companies contribute to their customers. But even these well-intentioned people are caught in a paradigm. And more often than not, that worldview will dictate what behaviors and actions are and are-not possible.

Our existing paradigm where we view the organization as a means of production, a machine whose dominant purpose is to produce efficiently in the pursuit of maximizing shareholder value is at the root of why we find ourselves in this situation.

There is an alternative worldview emerging. I call it The Living Organization. It is a framework that casts the organization as a living entity that is born to fulfill a Soulful Purpose. A purpose that is by it very nature meant to contribute to the betterment of society through enhancing the lives of those it serves.

In this paradigm, the leaders are the custodians, the ones who nurture the development of The Living Organization so that it grows in its ability to contribute to the enhancement of its community of consumers, suppliers and employees. And in doing so, it creates value. When it creates real meaningful value, those who have supported it along the way, the investors and others will share in the increased value and profits. In this paradigm, all organizations become like every living individual, a creative citizen of our society.

Will there be some bad apples in the mix? Of course there will. Just as there are individuals who do not behave as good citizens, we will have some companies who as a collective are derelict in the role as citizen. But just as we do not condemn the whole of humanity for the wrongful behaviors of a few, we should not condemn the whole of business for the few who do not behave as good corporate citizens.

Maybe the answer to our challenges as directors is to go beyond the simple solutions and certainly beyond the attempts at legislating proper behavior, and move the conversation to the level of what do we stand for and how do we think about the organizations we lead.

Now that is a worthy project, though it will likely take a long-time. It will certainly shift the very conversation of what business is all about.

Do you know what the soulful purpose of your company is? Can you say what it is you really stand for and what is your unique purpose in the world?

I lost a dear friend and partner this past month. Many of you knew Gregg Gallagher, who passed on April 6, 2011 after loosing a brave battle against cancer.

It is very hard for me to put into words my feelings, thoughts and remembrances of Gregg because the experience of knowing him runs much deeper and richer than words can express. The subtle feelings, the smiles in my heart when I think of him. The deep appreciation of all that he has contributed to me over the last six years.

Gregg was my partner in business and my partner in the birthing of The Living Organization model. He would challenge my thinking, add to my thinking and refine my thinking. As author, I may have given the book life but Gregg was its midwife.

It is but a small repayment to acknowledge him in the book by dedicating the book to him (which I asked him if it would be OK during our last few visits together). I am also going to create an annual Gregg Gallagher Award for Excellence in Execution and innovation (anyone who would like to help me get this award nationally recognized would be warmly welcomed).

Gregg also contributed greatly to our business community through volunteering with Tech Biz Connections, AeA (TechAmerica) and other entrepreneurial communities. He was so eager to help innovations find their way into the world and help those who had a dream. I can only imagine the many people who will always remember Gregg for how he helped them.

And one of those people who will always remember how Gregg helped them is me. So to my friend Gregg, I hope you remembered to take your iPad2 or iPhone along because you promised to Tweet us all from where you reside now.

This past weekend we facilitated a strategy session for the board of directors of a local non-profit. Our major objective was to create a greater level of engagement among the board (especially among its large percentage of new members) and to focus their efforts on their number one challenge—funding.

Most facilitators would have focused on the funding challenge and brainstormed different funding sources and alternative ways to raise money. We did not.

Rather we began a process of deeply connecting each board member with the Soulful Purpose ™ of the organization and creating a clear picture of what they wanted to create in the future. But this was not an intellectual exercise: it was a deeply felt connection and expression of what this organization was truly about.

We started by having members of the board perform a little improvisation. We had one member play their typical client and another person play a staff member. Then we replayed it again, but this time the organization did not exist and so there was no place for the client to turn. This little exercise did more to create a sense of the purpose and a shared commitment to its mission than any mission/vision/values exercises they had done before.

Next we had the board define the future they wanted to create. We separated the board into three groups. The first group had to draw a picture that depicted the future. The second group had to create a news story datelined 3 years from today that spoke of what the organization was doing and accomplishing and how it had gotten to that point over the last three years. And the third group acted the future.

Each group represented the future in slightly different ways but all had similar themes. Combined, they created a real sense of what the board dreamed this organization could be and would become. And they were clearly aligned and fully engaged in creating their desired future.

“What about the funding issue?” you ask. We addressed it, but in a completely different way than how they had been addressing it. We shifted their focus to who would be engaged and enthused by their mission, excited to help them.

They began to realize that instead of going to funding sources, such as corporations, and foundations asking for money, they were going to enroll people and organizations in their mission. They were going to create partners in a mission rather than funders of a cause.

The board is now focused on building a community of people and organizations who are as passionate and committed to their mission as they are. And just as each board member found their unique way to contribute to the mission, they trusted that each member of their community whether a corporation, foundation or individual would find a way to express their commitment. It could be in providing volunteers from their employee base, it could be opportunities to create awareness in the community about the services available, or it could be money.

The important thing is that they are no longer going to go with their hats in their hands begging for money. Rather they are going to offer opportunities to partners who can make a difference and feel drawn to their unique mission.

This blog is about how to bring life back into organizations. Whether a non-profit or a for-profit, organizations are living beings who want to create and contribute. Their Soulful Purpose™ is the reason they exist. When everyone involved feels deeply connected to this purpose and has a deep feeling and commitment to what they are collectively creating, the energy available to manifest the desire future is abundantly available.

How do you engage your employees, your customers, and your community in your purpose? How do you keep your purpose alive in their minds?

A whimsical drawing and poignant saying from Brian Andreas of Storypeople® awaits me almost every morning and I wanted to share today’s email with you. It feels especially important as we walk through today’s less than financially rosy world.

I once had a garden filled with flowers that grew only on dark thoughts but they need constant attention & one day I decided I had better things to do.

Are you focusing on what you want to create? Where you put your attention is where you will see results. If you want to create a world of fear, always think of what dreadful thing might happen, especially focus on the worst possible scenario. You will soon recognize all the dreadful things as they come at you.

If you want to create a world of lack, focus on what you want but cannot have. Feel sad over all the things you can’t have. You will feel very poor in no time at all.

Norman Vincent Peale once said, “The person who sends out positive thoughts activates the world around him positively and draws back to himself positive results.”

We know that everything is energy and energy cannot be destroyed. We also know how much better it feels to be around someone with positive energy, especially when that positive energy is focused on a project we are passionate about. So be that positive person that attracts other positive people to create positive results.

Create a positive story about your life. Look for positive stories of how your company treats its customers. Tell uplifting stories of the difference you and your colleagues make in the world. Story by positive story, you can change the world.

I’d love to hear a positive story about how you changed someone’s life recently.

We continue to hear people calling for the business community to be more accountable for their actions. Nowhere is this stronger than in the relationship business has with our environment, our planet and its resources.

I don’t want to pretend this is a simple issue and one that can be easily addressed. I do not believe in placing all the blame for the social and environmental challenges in our society totally on the shoulders of businesses.

Our society is made up of an intricate web of relationships. We are all involved in an interdependent dance, and all of us contribute to the results we have (both the positive and negative results).

It is time for us to change, for all of us to change. But to change we need a new way of thinking: We cannot solve the current problems within the same paradigm that created them.

We have held ourselves separate from our environment. We have viewed labor separate from management and we have held businesses simply as machines of production. And as we know, machines do not have a soul: they merely produce what they are designed to produce.

What if we changed our view of what a business is? What if we saw business as another life form, a living entity that is meant to create?

A living entity comes into being to fulfill a unique purpose, a Soulful Purpose™; a purpose that is about contributing to the well being of our society. This purpose serves the advancement of the organization and of our society; the advancement of life in general.

All life forms are composed of other life forms. The human body is comprised of cells that form organs that work together for the well being of the host body. What if we recognized that employees and management are the organs of their host body, “The Living Organization®, and the organization was part of its host body, our society?

It seems to me that the conversations would change, and we would stop blaming business alone for the ills of society. We could actually begin to see a new way of thinking and deciding which will yield a different set of choices and behaviors

To begin to shift our paradigm will also call for a shift in our language. For example instead of saying “our people are our most important assets” (assets are things we own) we might say, “Our people are our most valuable resources, the source of life energy within our living organization.”

When we view our organizations as living beings, we recognize they have a responsibility to behave as a contributing member of society, in the same way we expect people to behave as contributing members of society. It will be a natural part of a living organization to understand one’s role in the ecosystem and to fulfill that role. We would be in relationship with all other living things.

After years of trying to evolve business, of trying to bring about a change of awareness and to create social responsibility and higher ethical behavior, I have concluded that the only way we will get there is if we reorient our framework and shift the paradigm from a machine of production to The Living Organization® model.

Does your business function as a responsible contributing member of our society or as a machine that is just interested in producing? Do you know your soulful purpose and are you living true to it?

As we discussed last week there is a difference between an Incremental Strategy and Innovation Strategy.

All strategies are designed to improve performance, which means you are going to do something different than what you are doing. Whenever you establish a new strategy, you are establishing a desire to change something. Whether it is incremental or innovative, managing strategy execution is managing change.

As the diagram shows even incremental strategy has a slope to it, meaning that some change management is going to be called for. To increase performance over time, either path requires changes in how the organization operates. Yet clearly, the change management process for an innovative strategy will be much more significant than for an incremental strategy.

For many companies, strategic plans are incremental in nature and very close to operating plans. These are mostly plans to improve operating effectiveness and extend the current business model. But when you are setting a strategic direction that is innovative, trying to manage the strategy execution the same way will be devastating and unlikely to succeed.

What determines an innovation strategy is the degree by which you are making changes to the basic business model. This model is the norms, rules, metrics and processes of how the organization produces its results. (For a more detailed description of this refer to Harvard Business Review Article “Reinventing Your Business Model”).

Innovation strategy requires a different focus that addresses the forces within your organization that are operating mostly under the surface at the unconscious level. Mostly we pay attention to what we do and how we do it, what we can observe and measure. The forces associated with the activity we perform.

And there are other forces operating within our organization that we also need to pay attention to. There are relationship patterns that are unconsciously affecting results. For example somehow everyone knows to go to Bob for any of the key issues around fulfillment. But there is no identified process that says, “go to Bob”.

The same is true for other forces, forces that unconsciously define how we interact with the customer, how we choose projects to bid on, how we collectively respond when the boss is upset, and the many unstated yet felt rules and values of the organization. Nothing is specifically defined yet everyone behaves consistent with these energy patterns.

The fact that much of our organization behavior has become unconscious is mostly a good thing; it has been incorporated in the semi-autonomic nervous system of the corporate body. It’s a lot like learning to ride a bike. Eventually we become proficient because most of the rules for riding and balancing have become part of our unconscious, part of our semi-autonomic nervous system. This is what allows an organization to operate with a high degree of efficiency. It is also what makes changing the basic rules for how we operate so difficult and why we have to make those rules conscious once again.

What we call resistance to change is really nothing more than energy that has formed very strong flow patterns. Our organization only appears to be resistant to change because these energy patterns usually remain under the surface of what we pay attention to.

To manage the execution of your innovation strategy, we must first identify the existing patterns of energy flow. Like the processes of activity that we normally think of changing, we can also change these energy flows. Often slight changes in the patterns of relationship energy and context energy, the energy that defines our meaning and purpose, can create significant changes in results.

It is during the innovative shifts in strategy that the Context and Relationship Fields have the most impact. If you remain unconscious to them, they could very well work against you. However if you include specific strategic initiatives to reframe them, they will carry you on a wave of success.

Have you had to execute an innovation strategy where the business model was changed? Share with us what your experiences has been. How did you address the issue of context and relationships changes that the strategy required?

Everyone has a strategy. Simply put a strategy is a definition of the results you want to create and an approach of how you think you will manifest those results. Why do I say everyone has a strategy? Because without a strategy, you would have no basis for making any decision.

When it comes to executing strategy, it is important to understand the difference between executing a strategy and achieving operating objectives. Too often these two are thought of as one and the same, and they are not.

The best way to understand the difference is to think of your organization as a simple manufacturing production line. A production line is set up to produce a certain product and is optimized to produce that product in the most efficient way possible. When it is time to produce a different product, the production line is stopped and retooled for the new product.

Your company, like a production line, has been fine tuned to produce the goods and services for the customers you serve. Every aspect of your company from engineering to finance, from operations to sales has evolved over time to make the production of the goods and services you produce as optimal as possible. You have developed certain norms, rules, metrics and even a culture that has created your success. Achieving your operating objectives is akin to meeting production goals in the “production line” metaphor.

If your plans call for little or no change to the basic way you are operating, then your existing “production line” may be incrementally improved. You may add a new tool such as implementing an ERP system, or improve the training of the people in various departments, but your basic production line, the fundamental way you operate, is not going to change. Strategy planning in this scenario is an incremental strategy, strategies to improve on the existing way we do business.

But lets now look at a different type of strategy, an innovation strategy. Examples of an innovation strategic direction would be moving up the value chain, offering a higher value-added set of products and services, or moving from a product-oriented business to a service-dominated business (or vice versa).

These changes in strategic direction require a shift in how you will do business in the future. You will, for example be moving from selling a technical product to engineers, to selling a solution to corporate executives. You will likely be dealing with longer sales cycles, different approaches to determining the product roadmap and different methods for reaching the market. You might even be facing a different revenue model. In essence the norms, rules, structures and business models that you have used to create success will all likely have to change.

In terms of our metaphor you will be fundamentally retooling the organizational “production line”. But unlike a manufacturing operation you cannot shut down the existing production line to retool it. Executing an innovation strategy requires retooling the organization production line while the existing production line is still operating. In my next blog, I will offer “hidden forces” that you need to consider in either.

Does your company strategy fall into the innovative or incremental category? What are your experiences with an innovative strategy?

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About the Quantum Leaders

The Quantum Leaders team is deeply committed to helping organizations and their leaders realize their visions via focused execution of their strategy. This blog is our way of opening a dialog with our constituencies and fellow-travelers on the path of improved execution and all the dynamics that contribute to it.

Quantum Leaders helps guide our clients through the critical strategic business transitions all companies will eventually pass through. Our clients are middle market companies and business units of Fortune 1000 companies.